IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v46y2025i7p4032-4055.html

ESG Enterprise Hybrid Risk Diversification Mechanism Based on Third‐Party Guarantee

Author

Listed:
  • Jiaxin Zhuang
  • Yinglin Wang
  • Shengxu Shi

Abstract

To alleviate the financial burden of supporting ESG disclosures, this study introduces third‐party institutions and proposes two alternative models: GFSL (Guarantee First, Subsidy Later) and SFGL (Subsidy First, Guarantee Later). Using evolutionary game theory, it analyzes strategic decisions and compares models through numerical simulations. Results show that subsidy caps and premium levels must be balanced carefully. SFGL suits cases with minimal external influence, while FGS with dynamic incentives fits strong responders. For opportunistic enterprises, SFGL is preferred. This study offers theoretical insights and practical guidance for optimizing ESG subsidy strategies and advancing sustainable finance.

Suggested Citation

  • Jiaxin Zhuang & Yinglin Wang & Shengxu Shi, 2025. "ESG Enterprise Hybrid Risk Diversification Mechanism Based on Third‐Party Guarantee," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(7), pages 4032-4055, October.
    • Handle: RePEc:wly:mgtdec:v:46:y:2025:i:7:p:4032-4055
    DOI: 10.1002/mde.70001
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.70001
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.70001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Xuan Zhang & Jingxian Zhang & Yongjie Feng, 2023. "Can companies get more government subsidies through improving their ESG performance? Empirical evidence from China," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-25, October.
    2. Zhang, Dongyang & Meng, Li & Zhang, Jintao, 2023. "Environmental subsidy disruption, skill premiums and ESG performance," International Review of Financial Analysis, Elsevier, vol. 90(C).
    3. Christopher Marquis & Michael W. Toffel & Yanhua Zhou, 2016. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," Organization Science, INFORMS, vol. 27(2), pages 483-504, April.
    4. Leite, Brian J. & Uysal, Vahap B., 2023. "Does ESG matter to investors? ESG scores and the stock price response to new information," Global Finance Journal, Elsevier, vol. 57(C).
    5. Na, Chaohong & Ni, Zhixing & Shu, Qiu & Zhang, He, 2024. "Can government subsidies improve corporate ESG performance? Evidence from listed enterprises in China," Finance Research Letters, Elsevier, vol. 64(C).
    6. Kuniyoshi Saito & Daisuke Tsuruta, 2018. "Information asymmetry in small and medium enterprise credit guarantee schemes: evidence from Japan," Applied Economics, Taylor & Francis Journals, vol. 50(22), pages 2469-2485, May.
    7. Fang Chen Kao, 2023. "How do ESG activities affect corporate performance?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(7), pages 4099-4116, October.
    8. Pankaj C. Patel, 2024. "Requisite variety theory and third‐party guarantee loans: How local bank branches can reduce loan defaults," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(1), pages 226-246, January.
    9. Liu, Changyu & Gong, Wanrong & Dong, Guanglong & Ji, Qiang, 2024. "Regulation of environmental, social and governance disclosure greenwashing behaviors considering the risk preference of enterprises," Energy Economics, Elsevier, vol. 135(C).
    10. Amir Amel-Zadeh & George Serafeim, 2018. "Why and How Investors Use ESG Information: Evidence from a Global Survey," Financial Analysts Journal, Taylor & Francis Journals, vol. 74(3), pages 87-103, July.
    11. Nie, Song & Liu, Junxian & Zeng, Gang & You, Jiyuan, 2023. "Local government debt pressure and corporate ESG performance: Empirical evidence from China," Finance Research Letters, Elsevier, vol. 58(PB).
    12. Dumrose, Maurice & Rink, Sebastian & Eckert, Julia, 2022. "Disaggregating confusion? The EU Taxonomy and its relation to ESG rating," Finance Research Letters, Elsevier, vol. 48(C).
    13. Jianbo Song & Haiqing Zhang & Zihao Su, 2021. "Environmental subsidies and companies’ environmental investments," Economic and Political Studies, Taylor & Francis Journals, vol. 9(4), pages 477-496, October.
    14. Yilu Zhu & Ruopiao Zhang, 2023. "How local tournament incentives influence ESG disclosure: CEO’s genuinely altruistic or self-serving?," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 20(2), pages 383-404, July.
    15. Alexandra Danila & Maria-Gabriela Horga & Oana Oprisan & Tanase Stamule, 2022. "Good Practices on ESG Reporting in the Context of the European Green Deal," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(61), pages 847-847, August.
    16. Aolin Leng & Mengdi Wang & Hanmei Chen & Zhe Duan, 2022. "Can loan guarantee promote innovation behaviour in firms? Evidence from Chinese listed firms," Applied Economics, Taylor & Francis Journals, vol. 54(11), pages 1318-1334, March.
    17. Chitra Sriyani De Silva Lokuwaduge & Kumudini Heenetigala, 2017. "Integrating Environmental, Social and Governance (ESG) Disclosure for a Sustainable Development: An Australian Study," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 438-450, May.
    18. Lisa D. Lewin & Danielle E. Warren, 2025. "Hypocrites! Social Media Reactions and Stakeholder Backlash to Conflicting CSR Information," Journal of Business Ethics, Springer, vol. 196(2), pages 419-437, January.
    19. Feng Yang & Tingwei Chen & Zongbin Zhang & Kan Yao, 2024. "Firm ESG Performance and Supply-Chain Total-Factor Productivity," Sustainability, MDPI, vol. 16(20), pages 1-19, October.
    20. Monica Singhania & Neha Saini, 2023. "Institutional framework of ESG disclosures: comparative analysis of developed and developing countries," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 13(1), pages 516-559, January.
    21. Runyu Li & Fuguo Cao, 2023. "The impact of sustainable public procurement on corporate ESG performance—The Chinese evidence," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-21, October.
    22. Wang, Wenna & Yang, Zhen & Chen, Jin & Liu, Jingjiang, 2025. "How does ESG affect government procurement in countries where ESG systems are established from the top down?," Economic Modelling, Elsevier, vol. 146(C).
    23. Nicole Darnall & Hyunjung Ji & Kazuyuki Iwata & Toshi H. Arimura, 2022. "Do ESG reporting guidelines and verifications enhance firms' information disclosure?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1214-1230, September.
    24. Valentin Vogl & Max Åhman & Lars J. Nilsson, 2021. "The making of green steel in the EU: a policy evaluation for the early commercialization phase," Climate Policy, Taylor & Francis Journals, vol. 21(1), pages 78-92, January.
    25. Huang, Ying, 2022. "Government subsidies and corporate disclosure," Journal of Accounting and Economics, Elsevier, vol. 74(1).
    26. Ruzhi Xu & Tingting Guo & Huawei Zhao, 2022. "Research on the Path of Policy Financing Guarantee to Promote SMEs’ Green Technology Innovation," Mathematics, MDPI, vol. 10(4), pages 1-24, February.
    27. Zhang, Dongyang, 2023. "Subsidy expiration and greenwashing decision: Is there a role of bankruptcy risk?," Energy Economics, Elsevier, vol. 118(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Guangrui & Fang, Ying & Qian, Hao & Ding, Zhigang & Zhang, Alex & Zhang, Songlin, 2025. "Incentive or catering effect of environmental subsidies? Evidence from ESG reports on greenwashing," International Review of Financial Analysis, Elsevier, vol. 103(C).
    2. Yin, Wenjing & Wang, Gaomiao & Yu, Yumiao, 2025. "Watchdogs of greenwashing: The role of long-term institutional cross-ownership," Global Finance Journal, Elsevier, vol. 67(C).
    3. Kong, Linghui & Chen, Rongquan & Huang, Xinyu & Wang, Fan, 2025. "Can Industry-Specific Information Disclosure Guidelines Alleviate Corporate ESG Divergence? Evidence from Chinese List Companies," International Review of Financial Analysis, Elsevier, vol. 106(C).
    4. Kasırga Yıldırak & Ömer Kayhan Seyhun, 2025. "Refining ESG models: embedding natural capital valuation beyond box-ticking compliance towards confronting planetary boundaries," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Addressing climate change data needs: the central banks' contribution, volume 63, Bank for International Settlements.
    5. Pi, Tianlei & Jiao, Linke & Zhou, Yuhan & Shi, Jin, 2026. "Biodiversity risk and corporate greenwashing: Evidence from China," Research in International Business and Finance, Elsevier, vol. 83(C).
    6. Wen, Limin & Li, Junxue & Sheng, Jiliang & Zhang, Yi, 2025. "Active portfolio management in the face of ESG uncertainty: An agile framework for adaptive investment strategies," The North American Journal of Economics and Finance, Elsevier, vol. 75(PA).
    7. Mustafa Tevfik Kartal & Serpil Kılıç Depren & Ugur Korkut Pata & Dilvin Taşkın & Tuba Şavlı, 2024. "Modeling the link between environmental, social, and governance disclosures and scores: the case of publicly traded companies in the Borsa Istanbul Sustainability Index," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 10(1), pages 1-20, December.
    8. Zhong, Ma & Niu, Zhuangzhuang & Zhu, Yunfu & Li, Ruiqian, 2025. "Government green subsidies and corporate ESG greenwashing: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 88(C), pages 1321-1346.
    9. Oehler, Andreas & Neuss, Charlotte, 2025. "ESG disclosure vs. ESG ratings: Consistent information value?," International Review of Financial Analysis, Elsevier, vol. 107(C).
    10. Bingler, Julia Anna & Kraus, Mathias & Leippold, Markus & Webersinke, Nicolas, 2024. "How cheap talk in climate disclosures relates to climate initiatives, corporate emissions, and reputation risk," Journal of Banking & Finance, Elsevier, vol. 164(C).
    11. Yang Zhang, 2025. "Does ESG Performance Affect Enterprise Innovation Performance? A Study on Governance and Resource Effects," SAGE Open, , vol. 15(3), pages 21582440251, July.
    12. Jieyu Ren & Peng Wu & Liya Hou, 2024. "Social media attention and corporate greenwashing: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(6), pages 5446-5465, November.
    13. Li, Weiping & Mao, Zhuowei & Ren, Xiaohang & Liang, Jing, 2025. "Retail investor attention: Guardian of corporate ESG integrity or catalyst for greenwashing?," Energy Economics, Elsevier, vol. 144(C).
    14. D'Arcangelis, Anna Maria & Galloppo, Giuseppe & Guida, Roberto & Paimanova, Viktoriia, 2025. "CSR engagement and financial performance: The case of Italian unrated ESG small caps," International Review of Economics & Finance, Elsevier, vol. 101(C).
    15. Egidio Palmieri & Maurizio Polato & Josanco Floreani, 2025. "Green Bond Issuance and Environmental, Social and Governance Scores: Do They Impact Bank Performance?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(6), pages 8577-8597, November.
    16. Fu, Changluan & Yu, Chenyang & Guo, Mengting & Zhang, Lin, 2024. "ESG rating and financial risk of mining industry companies," Resources Policy, Elsevier, vol. 88(C).
    17. Sandra Chrzan & Christiane Pott, 2024. "The steering effect of the EU taxonomy: Evidence from German institutional and retail investors," Review of Financial Economics, John Wiley & Sons, vol. 42(4), pages 349-375, October.
    18. Zhao, Jiyang & Wang, Xiaohong, 2025. "Managerial myopia, technological innovation, and greenwashing: Moderating roles of financing constraints and environmental uncertainty," Technological Forecasting and Social Change, Elsevier, vol. 218(C).
    19. Luca Marrucci & Roberta Iovino & Fabio Iraldo, 2025. "Environmental Sustainability Award Winners: Do They Communicate Their Environmental Performance Without Potential Greenwashing?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(2), pages 2783-2794, March.
    20. Chen, Liming & Dai, Tao & Zhang, Chen & Zhang, Zhi, 2025. "Digital government and corporate ESG performance," International Review of Financial Analysis, Elsevier, vol. 105(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:46:y:2025:i:7:p:4032-4055. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.